I-1100: State booze estimate as clueless as M’s management

Backers of Initiative 1100, one of two liquor privatization measures on the fall ballot, have responded to a state study saying that the measures would cost the state dearly.

“Asking state government’s Office of Financial Management (OFM) to give you the financial impacts of Initiative 1100 is a little like asking the Mariners management in April what the club’s chance are of making the playoffs,” said Ashley Bach, an I-1100 spokesman.

“In general, OFM appears to have taken very conservative estimates of the ‘costs’ of privatization, while ignoring or minimizing factors that would offset, if not ultimately exceed those costs….Here are some questions that OFM did not consider in its analysis:

“No consideration was given to the number of private sector jobs that would be created with the passage of I-1100 and the economic benefit in tax revenue that would bring state and local governments.

“OFM puts no value on the benefits that would surely flow from having the Liquor Control Board focus on public safety and enforcement, rather than sales. For instance, the smuggling of liquor from low-cost states like Nevada and California is a huge problem that the state currently ignores. A better enforcement effort to catch the worst offenders would increase state revenue. A privatized liquor system would also lead to a greater selection of higher-end liquors, which would also increase revenue.

“Not enough consideration was given to the additional Business & Occupation tax that will be paid as a result of I-1100.

“OFM minimized the revenue the state could receive from the sale of the state’s liquor distribution center and the subletting of existing state liquor stores.

….

“OFM gives little or no credit to ending the state’s outrageous 51.9 percent markup on a liter of alcohol in favor of private sector stores who operate on a much lower markup of around 15 percent. A lower markup under I- 1100 could mean additional sales.

“We believe the State Auditor’s report on liquor privatization to be a much more objective assessment of costs and benefits,” Bach said.